ATandT Dumping Land Lines Doesn't Mean Saying Goodbye, Say Analysts

AT&T's request that the Federal Communications Commission allow it to phase out its public switched telephone network doesn't mean that Americans will have to do without land lines, analysts say. The business could be sold to other parties.

AT&T told the Federal Communications Commission in a document dated Dec. 21 2009, that keeping
up both its land-line and cellular businesses will prevent it from meeting Congress'
request to extend broadband access to 100 percent of Americans in a "timely
or efficient manner."
Calling the PSTN (public switched telephone network) and POTS (plain-old
telephone service) "relics of a bygone era," AT&T recommended
that the two be promptly retired.

"I certainly understand AT&T's desire to start the music... that will
allow them to waltz away from the land-line business," Charles King,
principal analyst with Pund-IT, told eWEEK. "I guess the question becomes
how do you transition away-especially with a technology as critical to communications
as land lines are-in a way that doesn't leave people so isolated."

News of the AT&T recommendation has raised questions about the general
safety issues of relying on cellular services alone, as well as possible data
security repercussions.
"There is a safety aspect to reducing the number of available networks,"
Ken Hyers, an analyst with Technology Business Research, told eWEEK. "In a
natural disaster, redundant communications networks are important. From a
safety standpoint, the more communications networks that there are, the better
the chances are of making calls."
Hyers added that a land line can be particularly useful during a 911 call,
when the line is tied to an address, and pointed out that in some locations
cellular reception is less reliable. "Also, during high-use periods, such
as during a natural disaster, a cellular network is liable to suffer from
capacity issues that can cause dropped calls or make it impossible to even make
a call," he said.
"That said," Hyers continued, "AT&T's role is to act as a
business, not as a provider of a public safety network."
Roger Kay, an analyst with Endpoint Technologies, similarly said he sees
AT&T as naturally looking out for its business needs. "I think the
future, really, is in wireless, and AT&T is looking forward to stepping
away from its land-line business," he told eWEEK.
While offering that "there's a lot to be said for the existing system,"
Kay explained the lower up-front investment that wireless requires. "Wireless
is modular, so you can built it out a bit at a time," he said. "That's
a pretty handy architecture."
The IRS has recommended that taxpayers
calling with questions do so over a land line, for heightened security, but
both analysts dismissed this as an argument.
"I'd be much more worried about somebody standing near me overhearing
what I say on the phone than [about] someone [trying] to intercept my cellular
call," Hyers said. "With the advent of 2G digital cell phone
networks, intercepting and listening in on cellular calls is much more
difficult."
Kay agreed about the difficulty of intercepting a call and then unscrambling
it. It's an effort that would have to be very focused on a particular call, he
said, and not an instance of casually scanning the airwaves. "I think all
forms of communication can be intercepted," he said.
More pressingly, neither believes that AT&T unburdening itself of its
land-line business means that Americans who want land lines will have to do
without them-at least any time soon.
"It wouldn't just go away, there's a value there," said Kay, who
compared the POTS situation to AOL figuring
out what to do with the legacy customers who were still interested in its
services, even after it was ready to move on.
Hyers added, "I don't necessarily see the PSTN being abandoned. Rather,
I could see new companies being formed that take over the PSTNs from network
operators and maintain the land-line networks, probably with government
subsidies."
He continued, "The service would be most justifiable in regions that
are poorly served by alternative communications networks like wireless and
cable networks, primarily in rural areas. However ... the PSTNs will eventually
disappear over time."
King pointed out that people who depend on land lines tend to be in
particular areas. "It could create an interesting opportunity for local or
regional carriers who would be willing to take over the service until broadband
becomes available," he said, "if not as a permanent venture."

Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.